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McCune Foundation
Background * One of the top 10 foundations in Western PA Insights McCune Foundation loses $130 million in subprime mortgage crisis in 2008 : Mar 30, 2008 The McCune Foundation blames the subprime mortgage crisis for a $130 million loss in assets that has forced the foundation to suspend grant giving until at least June 2008. In 2007, the foundation awarded $28.9 million in grants, benefiting institutions from Carnegie Mellon University to the Carnegie Museums of Pittsburgh. But this year the foundation has awarded no money so far because one of its major stocks, National City Corp., has lost almost two-thirds of its value in the subprime mortgage mess. As a result, McCune's assets dropped from $606 million last year to $515 million this year. James Edwards, chairman of the foundation's distribution committee, said he still believes McCune will award about $27.5 million in grants this year, down $1.4 million from 2007. However, he said it is unclear what the final impact of the subprime turmoil will be on the foundation. Examiner.com Related Articles: * DEP, Geological Survey test Pittsburgh water for pharmaceuticals * Giant Eagle alleges chocolate price fixing in suit * Carnegie Mellon U. robots lighten loads * Crime in trendy Pittsburgh neighborhood brings police crackdown * Jury finds ex-officer fired for religious beliefs "It was unknown to me the gravity and depth of their exposure to the mortgage market," Edwards said, explaining his reluctance to sell the foundation's 4.8 million shares in National City. "What I've learned and didn't know before is that National City is one of the few big names exposed to that crisis," he told the Pittsburgh Tribune-Review. In the past year, National City stock went from a trading high of $38.32 to $6.56. McCune's shares plunged in value from $185.1 million to $31.7 million. The McCune Foundation was established in 1979 by the will of Charles L. McCune, a banker and oilman who served as the director, president and chairman of the board of Union National Bank of Pittsburgh, which eventually became National City. In 1992, the foundation's board filed suit to try to have an outside manager oversee foundation assets. The foundation lost in court but began a public campaign in 2000 to force National City to cede some of its control over McCune's assets. Under a deal reached by the two sides, National City became manager of the foundation's assets and Edwards was given the authority to sell National City stocks. But the deal did not outline who would control proceeds from the sale of the stocks, which Edwards said made him wary of selling. "We didn't feel that was an adequate resolution," he said. "Now we have a real reduction of the market value that's resulted in a real reduction in our grant total. Everything we were worrying about in the past is in front of us." Most foundations choose to diversify their stock holdings to ensure grant-giving stability in times of market turmoil. For example, Heinz stocks make up less than 1 percent of the portfolio of the Heinz Endowments, so its assets have declined only $70 million to $1.56 billion from the end of last year to February. National City officials declined comment on the Tribune-Review story, saying that as a matter of policy it does not disclose dealings with customers, including private foundations. category:Foundation category:organizations